U.S. Copper Demand Recovery May Trigger Inventory Drawdown

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, Peru's energy crisis has raised market concerns over copper ore supply. Copper prices surged significantly during the night session, and end-users' acceptance of the current high copper prices and spot discounts has declined. According to SMM, downstream orders dropped sharply during the day, with purchasing sentiment subdued and dominated by rigid demand. In terms of market performance, suppliers continuously lowered their offers, and spot cargo has shifted from premiums to discounts, with the discount margin widening. However, Friday marks the last trading day of the SHFE copper 2605 contract. As delivery approaches, spot discounts are widening under the Contango price spread structure, and suppliers' willingness to ship to delivery warehouses is increasing. The delivery logic is expected to provide bottom support for spot discounts, limiting further downside room.

Today, #1 copper cathode spot prices in North China against the front-month contract were reported at an average discount of 250 yuan/mt to a discount of 130 yuan/mt, with the average discount of 190 yuan/mt down 10 yuan/mt from the previous trading day. The average transaction price was 106,535 yuan/mt, up 2,450 yuan/mt from the previous trading day.